J&W Partners Takes over SK Securities
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J&W Partners Takes over SK Securities
Cape Consortium withdrew its rights as priority bidder, making way for PEF firm to secure 10 percent stake

27(Tue), Mar, 2018

A view of the head office building of SK Securities in Seoul. (Photo: SK Securities)

J&W Partners will take over SK Securities with SK Co. announcing its decision as the PEF firm won the bidding for the securities firm last July, and will take a 10-percent stake in the securities firm. 

Financial authorities finally allowed the PEF firm to take over the securities firm some 30 days after the firm applied for regulatory approval. Cape Consortium, the priority bidder for SK Securities, withdrew its rights, which made way for J&W Partners to take over the 10-percent stake in SK Securities. The PEF firm will pay 51.5 billion won for the stake.

The PEF firm became well-known after become the priority bidder at a public auction of SK Securities by its mother company, SK Co., on Feb. 5. J&W had been virtually an unknown entity before the announcement. The company was launched in 2015 as a private equity firm jointly set up by Jang Wook-jei and Christopher Wang, an American businessman. The company was named according to the initials of the co-founders’ last names J and W. Kim Kyung-nam joined them to help run the company.

The three managers had worked for Jarbeth Partners, a domestic private equity firm, for four years from 2011. They were responsible for managing the mergers of MG No-Life Insurance, the former Green Non-Life Insurance. Jang set up J&W Partners in 2014 after leaving Jarbeth.

He led the new investment firm to create J&W Global Fintech Fund, which was valued at 11.1 billion won last April.

The fund made an initial business move last year by making an investment in Peratum, an Fintech firm in Germany. The fund participated in the public bidding for SK Securities by submitting the letter of intent. President Kim Shin of SK Securities is a good friend of both President Jang and Kim Kyung-nam through long business associations. They all worked for Mirae Asset Daewoo Securities and Mirae Asset Daewoo. They all sold the derivative products when they were with Mirae Asset Daewoo Securities, becoming close friends with each other.

They said SK Securities invested in the fund developed by J&W, which in turn participated in the bidding for SK Securities.

Cape Investment Securities was named as the priority bidder last July, but had to withdraw its bid due to interference by top financial authorities. It will also make an investment in the fund as a partner. J&W plans to secure additional funding through the issuance of new shares. They they will try to boost the fund through loans, including funds used to take over the 10 percent stake in the securities firm and the new shares issued.

The only probles left is getting approval for its majority stakeholder status from the financial authority. SK officials feel that it wouldn’t be a problem, because Cape Investment and Securities extension of loans to a majority stakeholder of a securities firm, which was illegal, will no longer be a problem, and thus the securities firm is expected to get approval for its majority stakeholder status.

Financial authorities are still serious about the case. Some of the key people at J&W Partners were the same people who handled the takeover of MG Non-Life Insurance for Jarbeth Non-Life Insurance.

The Financial Supervisory Service (FSS) charged that Jarbeth advised loan-like investments to investors when it was taking over MG Non-Life Insurance, which was ruled illegal by the FSS. The FSS issued a warning to the representative of Jarbeth Partners while issuing a punitive measure against the company itself.

Financial authorities are leery of Cape Investment and Securities and its consortium, which failed to take over SK Securities, participating in the fund to be created by J&W Partners as an investor.

If J&W Partners requests a screening for its status as a majority stakeholder in SK Securities, the financial authorities said they would have to go about it with a judicious manner. 

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